Strong growth in NZ property sales reported but still well below peak
|Wednesday, 16 January 2013|
Residential property sales in New Zealand are well below the long term average despite strong growth in 2012, according to estate agents.
Ongoing strong demand drove robust sales volume growth last year with the number of sales up 21% on 2011 and at its highest level since 2007, data from the Real Estate Institute of New Zealand (REINZ) shows.
But the organisation’s chief executive, Helen O’Sullivan, said that this is well below the long run average and substantially below the peak volume of 2003 when more than 120,000 residential properties were sold.
‘A new record median price and robust volume growth saw the New Zealand real estate market end 2012 on a strong note and positioned for those trends to continue into 2013,’ she added.
Auckland and Canterbury/Westland regions together make up over half the real estate activity where supply constraints resulted in significant price gains that have not been achieved elsewhere.
However, the strength of these two regions is starting to spill over into other parts of the country with Central Otago Lakes and Wellington both seeing more invigorated markets, particularly in terms of sales volumes.
The national median house price increased by $5,750, from $383,250 in November, to a new record high of $389,000 in December, an increase of 1.5%. Canterbury/Westland’s median house price moved up 1.7% compared to November to a new record median price of $351,000, although Auckland’s median house price eased by $5,000 to $535,000. The national median house price is up 9.6% compared to December 2011, while the Auckland median price is up 10.5% compared to December in the previous year.
‘The trend in auctions is evidence of the continued tightness of some parts of the residential real estate market where demand is increasing, but supply remains constrained,’ she added.
REINZ data shows there were 5,754 unconditional residential sales in December, an increase of 8.2% compared with the same time last year and a fall of 22.8% compared to November 2012. On a seasonally adjusted basis December’s sales were about in line with November and 14.8% higher than December last year.
Eight regions recorded increases in sales volume compared to December last year, with Northland recording an increase of 37.2%, followed by Auckland with 18.7% and Central Otago Lakes with 18.4%.
All regions recorded falls in sales volume in December compared to November, as is usual at the festive holiday period, with Northland recording the shallowest fall of 8.8% followed by Nelson/Marlborough with a fall of 11.2% and Canterbury/Westland with a fall of 11.3%.
Northland recorded the longest number of days to sell at 60 days, followed by Waikato/Bay of Plenty with 52 days and Central Otago Lakes with 51 days. Over the past 10 years the median days to sell for the month of December has averaged 33 days across New Zealand.
Nationally there were 1,102 homes sold by auction in December representing 19.2% of all sales, a slightly smaller proportion than the 20.7% sold by auction in November.
For the 12 months to December the total number of auctions reached 11,950 or 16.1% of all sales, compared to 7,101 or 11.6% of all sales for the 12 months to December 2011.
Over 2012 the number of Auctions grew by 68.3% with the rate of growth reaching 86.9% in the Auckland region and 33.2% for all other regions combined.
Across New Zealand the total value of residential sales, including sections was $2.73 billion in December, compared to $3.62 billion in November, and $2.32 billion in December 2011. For the 12 months ended December 2012 the total value of residential sales was $33.95 billion.
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